Financial independence is defined by Investopedia as a program of extreme savings and investing, giving someone the ability to retire at an age earlier than traditional budgets and retirement plans permit. To do this effectively, this would require you to dedicate around 70% of your total income to separate saving, naturally requiring a thorough and detailed financial plan.
So, with this in mind, today our experts are offering up 3 crucial ways you that could help you get that little bit closer to achieving financial independence this year. Covering a range of tips on budgeting, saving and income supplementation, we’ll help you get your finances in order so the dream of hanging up your work boots becomes increasingly real.
Be realistic when it comes to your goals
Often the biggest enemy of anyone pursuing financial independence is present reality. Upon working out the required extent of your savings plan and a likely timescale of how long it would take, the stark reality of the results can often reduce the ideal of early retirement to a just a dream
As such, it’s crucial that you’re always realistic with both your goals and expectations. Financial independence isn’t something that’s going to happen overnight or even within a few years and, depending on how much you earn, a high-value monthly savings plan isn’t going to be sustainable for your short-term living requirements. For a large number of people, these points alone are enough to make them give up on their dream of financial independence entirely.
So instead, be sure to focus your attention on more realistic, attainable goals that will act as a motivating factor to keep you ploughing through. While putting aside 20% of your monthly salary won’t make you financially independent within a 12 month timeframe, it will certainly get you a whole lot closer than trying to save up a larger sum of money per month, only to give up by month 3. The trick is to save sustainably, using each month as a stepping stone towards that final goal, as this will mentality encourage you to stick to your savings plan and be that much closer to the long-term aim as a result.
Look ahead on your career path
Naturally, the more substantial your income, the more you’re able to put away. With this in mind, remain vigilant and look ahead to your career path regularly, striving towards that next promotion or salary increase in order to fast-forward your progress towards personal financial independence.
In order to do this, why not ask yourself in which areas of your current job role you could improve? By identifying these to yourself, you will be more driven to take the necessary actions to address them. Whether that requires you to take an online course to brush up on your knowledge of outdated industry trends, or it means making an extra effort to appear more enthusiastic at work, determine what’s in the way of that next pay rise and do whatever it takes to tackle it head-on.
Supplement your primary income
To really catapult you towards your goals, consider combining the aforementioned increased career focus with a secondary income. For example, when armed with the right know-how, forex trading can present itself as the ideal way to earn a little extra income to help further increase your savings pot. Of course, this possibility of big wins equally brings with it the chance of big losses, so it’s vital you learn forex properly and in a professional manner by gaining invaluable experience on demo accounts first, before you start trying your hand in a live forex scenario.
There’s a whole host of resources that will help you learn forex, as well as digital and real-life trading courses where you can learn from award-winning industry experts. Of course, you’ll need to be willing to put the time and effort in to master the craft, but with the potential for profit acting as your main motivation, your dedicated time and effort could see you one step closer to your dream of financial independence this year.
By taking the right steps this year, we hope you’ll be able to find yourself closer to financial independence than ever before. For more information on how our financial professionals here at Learn to Trade could help you on your way, why get in touch today?